Italy's deficit was always greater than that of the U.K. — until 2007, when it shrank to just 1.5% of GDP. Since then, the roles have been reversed: Italy, constrained by its membership in the eurozone, has had relatively modest deficits, while the U.K., with a free-floating currency, has been able to spend more to recover from the crisis.

The big picture: Stereotypes die hard. The U.K. is proclaiming an end to austerity, while Italy has just emerged from yet another budget crisis.

• In the end, the bond vigilantes won, and the populist government was forced to announce that it will reduce its deficit over the next three years.
• Next year's deficit of 2.4% of GDP is now an absolute cap, and 2% or lower is the medium-term target.
• Meanwhile, expect Britain's deficit to explode after Brexit, as the government tries to counteract the effects of being cut off from its own continent.